MDV to raise RM2bil from bond/sukuk issuance without government guarantee
KUALA LUMPUR: Technology financier Malaysia Debt Ventures Bhd (MDV) plans to raise RM2 billion via bond or sukuk issuance next month to boost its lending including to start-ups.
MDV chairman Khairul Azwan Harun said as part of its funding diversification, MDV would be moving away from government-guaranteed bonds and sukuk.
The company was looking to source the RM2 billion directly from the capital market, Khairul added.
“This will be MDV’s fourth fund, which also marks the company’s first fund to be raised based on its own standalone credit rating” he said at a briefing yesterday.
Khairul said MDV was expediting efforts to support the government in stimulating the economy and ensure that the technology sector was well equipped to navigate the post-pandemic recovery and regain its growth momentum.
To achieve this, MDV would be implementing several key initiatives, chief executive officer Nizam Mohamed Nadzri said.
One of the immediate initiatives is the new source of funds via the RM2 billion bond/sukuk issuance to meet expected financing demand from tech companies in MDV’s mandated areas
“From the RM2 billion, we expect it to provide an added value of RM10 billion in financing over the next five years.
“More businesses in the technology sector can be helped. It will also increase the lending ability of MDV as the agency responsible for the upliftment of the country’s technology sector companies,” he said.
Meanwhile, Nizam said MDV had proposed to the government to extend the moratorium granted to its affected customers as they seek to recover and stabilise their operations.
“To assist these companies, MDV has proposed to the government, to expand the Liquidity Financing for Technology Start-Ups (LIFTS) programme with an additional RM100 million in funds.
“This programme, dubbed as LIFTS 2.0, will focus on providing affordable financing to eligible technology start-ups and MSMEs to implement their growth and development plans in achieving their post-pandemic growth potential.
“Similar to LIFTS, LIFTS 2.0 will maintain a low interest rate threshold and financing will be capped at RM10 million per applicant,” he added.
The moratorium by MDV since the start of the Movement Control Order in 2020 has benefited 66 companies with total deferments of RM134.3 million comprising principal and profit payments.
Further to this, in its capacity as a provider of venture debt financing for VC-backed start-ups, MDV has received the approval from the Finance Ministry to establish a venture capital company and a venture capital management company.
Nizam said another significant initiative planned by MDV was to establish a national technology financing hub at Technology Park Malaysia here.
The financing hub will focus on serving the needs of start-ups such as incubators and accelerators, to complement the Technology Commercialisation Agency under the Ministry of Science, Technology and Innovation to accelerate technological innovation.
“We envision that the hub will also function as a Centre of Excellence for venture finance, which will provide support and assistance to start-ups for them to enhance their skills and technical knowledge further as part of the process of growing their businesses.
“The hub also aims to provide infrastructure support such as shared office spaces and training centres that will contribute to the strengthening of the start-up ecosystem in Malaysia,” he added.